Tuesday, July 17, 2007

Not Quite........

Today was the big day. Dow 14,000 was crossed (we won't mention that the broader S&P 500 index actually fell on the day). I'm not sure what repelled the market away from this level. Your guess is as good as mine.


Of course, television pundits were completely obsessed with the Big Round Number. If and when we actually close above 14,000, it will be about 3 seconds before someone writes an article entitled, "Next Stop: 15K!" Yawn.


I took a small bearish position on CME today. It seems we have a failed breakout here. Plus, all the elation over BOT is past us now.


Intel is one of the largest and earliest earnings reports for Q2. As of this writing, this stock is down nearly 5%, wiping out about $7 billion in shareholder value. As an aside, YHOO also just reported, and they are down about 2% right now.


I've got puts on NutriSystem, whose stock is finally starting to slip some.


I also augmented by CVX position by buying some XOM puts.


That's it for today. I think some of the snarky comments have me less inspired to write a long, thoughtful post. I've got other things to do.

74 comments:

Des said...

Hang in there, Tim. Ignore the morons in the comments section. Most of them can't compose a well-rounded sentence. I always appreciate your posts and especially the charts, regardless of whether or not I agree with your opinion.

Tim Knight said...

Yeah, I know. I will soon by moving this entire blog to a platform where I can exclude the idiots. Their days, like this overpriced market, are numbered.

beanie11111 said...

Since you permabears really need help, i'm gonna give ya a new trend i notice that can help ya make some mad money. Posted at stockpickr.com :

----
'A ridiculous trend that seems to be working:
When FastMoney connects with MadMoney and they
both like a stock the same day or 1 day apart,
the stock usually goes down short term. Be it
FCX, COP or YUM. The question is, did they
recommend INTC at the same time?

Theory is that by the time the two groups of
gurus connect it probably means the stock has
run up alot already and the euphoria is baked
in.

I want to be wrong so i don't use this trend
anymore. Good luck.'
-----

Turns out, INTC was recommended by both shows no
more than 1 day apart! lol

Frank said...

Hey Tim,
One up for us bears! INTC, Yahoo drop off cliff after hours! SEMI lead TECH lead (well maybe not lead but at least drag them up) market. So INTC tank=SEMI tank=Market tank... Maybe it will go up a bit more, but top is not far off in my opinion.

Frank

Andrew755 said...

Tim,

Don't believe the hype.. I've noticed that the market is getting more friendly....

Look at the futures after hours...

I was buying like mad in the middle of the day, I think we are setting up for some downside.

I smell euphoria... I still think there is one more insanely big upleg coming after a correction...

I had to turn off CNBC this morning cause the pumping was making me sick

beanie11111 said...

Feels good to be vindicated, after being slammed by guru former master fund manager Jim Cramer.

http://stockpickr.com/members/view/answers/6509/


lol

Chris said...

Like Des said, hang in there buddy. I hardly ever post, but I still like to visit daily and read your blog. I especially like the pictures you post on the charts. They make me laugh!

Winace said...

IMW, DIA, SPY, and the Q's all came off some nice resistances today. Tomorrow's gonna be a hell of a ride. Hey Gary, I'm ALL in on the short side of IWM as of yesterday. One big bear call spread.

JakeGint said...

Gary, I'm ALL in on the short side of IWM as of yesterday. One big bear call spread.

_________________

Now get of heayahh, you silly English Connnniggit, befoah ah taunt you a secon' taaahmm!

(Fetchez la vache!)

Tim Knight said...

We're Knights of the Round Table,
We dance when ere we're able,
We do routines and chorus scenes
With footwork impeccable.
We dine well here in Camelot,
We eat ham and jam and spam a lot.
We're Knights of the Round Table,
Our show are formidable,
But many times, we're given rhymes
That are quite unsingable.
We're Opera mad in Camelot,
We sing from the diaphragm
a looooooot.
In war we're tough and able,
Quite indefatigable,
Between our quests we sequin vests,
And impersonate Clark Gable.
It's a busy life in Camelot,
I have to push the pram a lot.

cantdrive55 said...

Okay Mr. SPAMALOT ! Whatever !

You want the truth...you can't handle the truth !

JakeGint said...

Bear Stearns... anyone short her?

Bear Stearns Down On Report Funds Nearly Worthless

Shares of Bear Stearns Cos. -BSC- fell 2.4% to $136.50 after the brokerage firm told investors that the portfolio assets of two hedge funds that bet heavily on the market for risky home loans are almost worthless, people familiar with the matter told The Wall Street Journal.

The assets in Bear's more levered fund, the High-Grade Structured Credit Strategies Enhanced Leverage Fund, are worth virtually nothing, according to people familiar with the matter. The assets in the other larger, less-levered fund are worth roughly 9% of the value since the end of April, these people said.

The two funds have been in the spotlight for weeks after suffering heavy losses in the subprime market. Late last month, Bear helped stabilize the less-levered fund with a $1.6 billion secured loan- the enhanced fund began trying to unwind its remaining $1.1 billion in debt.

Frank said...

Well that was a fun free fall after market. SP found some support at prior high. Tomorrow bulls should try very hard to defend that. IF CPI not so good, and bulls can not get a grip, look out below... false break out lead to fast fall to bottom...

Frank

Locster said...

The fact that the DOW rises while other indices fall is largely due to the fact that the DOW is not a weighted index. That fact alone made me decide a long time ago to complely ignore that particular index!

It's perhaps useful as a kind of finger in the air. But personally I prefer hard rationality!

Regards,

Locster

Frank said...

Well, talk about weighted index. RSP, SP equal weight has not broke last Friday's high yet. RUS2000 still in range bound...

Frank

Marc said...

A 1:1 ABC up on the Dow which started in October, '05 finishes at 14,150. A small 1:1 ABC up which started Feb '07 finishes at 14,000. The largest, a quarterly ABC which started in mid 1982 finshes at 14,022. S&P's look close to being already finished, plus resistance at previous high in 2000 is right here. The Naz (specifically QQQQ which I follow) still have a small way to go. The longer this stretches, the worse it will be (i.e. great).

Jeff said...

Give Tim a break!

To be a motivated daily blogger offering many perspectives/insights is not easy to do. All perspectives on the market is valuable information to a trader. This is a game of probabilities and anything can happen at any moment. Tim's charts are excellent resources and he does a great job annotating them, free of charge. With that said all opinions are cheap to give...learn to use this info to your own benefit.

THANK YOU TIM FOR ALL YOUR HARD WORK!

Frank said...

By the way, another good article by the Dr. (Hope you don't mind Tim)

http://www.traderfeed.blogspot.com/

ARticle "Behind the Market's Weak Money Flows"

Frank

Tim Knight said...

Let me be clear about URLs.

I am *totally* happy for people to post links to articles, other blogs, anything! The ONLY thing I want to avoid is advertisements.

As for cantdrive's comment ("Okay Mr. SPAMALOT ! Whatever !") My pity for someone with the misfortune to live in a hole like Phoenix is so great than I have forgiveness in my heart for you.

Frank said...

Also looking at SMH and INTC, if you include after hour trade into the daily chart of both symbols, they are very nasty. SMH formed a very long shooting star on good amount of volume. INTC is at the bottom support line of the rising wedge (top resistance line is from the high around May 23 to the high of these pass few day, around July 12). Let's see how it react tomorrow. If Intel can bounce again right off the support line, then we may get a extension of its bull live. But if it gap down and keep going down at open, then maybe SMH will follow it down.

Then finally I might see the 4 year cycle correction (10% to 15%) correction for the whole market that I'm looking for.

We are very extended on this bull run, I think the longer we extend the worst the correction going to be. So better to have it now then later!

Frank

cantdrive55 said...

'My pity for someone with the misfortune to live in a hole like Phoenix is so great "THAN" I have forgiveness in my heart for you.'

Well said AND well spelled... ' yourself '.See, even you can have the occasional minor spelling error.

Oh and Tim ,by the way,I have a question.

Has the Decennial pattern NOW been broken (?)...since appaerently it was not on Dec. 30, 2005 , when we were at 10780 on the INDU .
(Remeber your:"THE DECENNIAL PATTERN IS BROKEN" headline for that date's blog ? )

You had a quote on that date's blog : "I'm looking forward to 2006 as a year when the market really starts to fall to pieces."
And yes ,we were at 10780 on the INDU.

Oh well ,maybe today was the top for a while. I'm kind of hoping that myself. Talk at ya' later !

P.S. - I only spend a fraction of my time in Phoenix. I'm actually about 400 miles south of you right now in Newport Beach.Yea,it's way too hot there in the summer , but it's a great place to spend time in the winter.

Tim Knight said...

cantdrive..........

The fact that I have been bearish through about this whole runup isn't lost on me. I get it. This is no surprise.

I'm sure when the bear market arrives, I can tout the fact that I've predicted 15 of the past 1 bear markets.

JBetz said...

Tim

Your CROX puts look they should start acting nicely. Excellent negative momentum divergences on the daily chart (RSI & MACD). Weekly MACD histogram rolling over nicely.

What godawful looking shoes.

JB
http://dormroomtechnicals.blogspot.com/

newequity said...

Tim, the bulls have more firepower than you and after the CPI tomorrow' we should rally big time.

Tim Knight said...

"Tim, the bulls have more firepower than you and after the CPI tomorrow' we should rally big time."

OK, newequity. Thanks for letting us all know.

I also appreciate your clearing up my misperception that my little trading account can't overpower the entire market. This whole time, I thought I was controlling the whole game, and everyone else was just a pawn.

sam said...

Top should be in, but s&p must break 1512 to confirm the down trend. The down trend should start with force in the next two weeks. Sell longs, goto cash. Sammy.

tradingtiger said...

Tim,

this is a great blog site. Great humor, great charts. thanks for doing it!

Erndog

Vic said...

I just hear a lot of giddy snorting and hoofing from over fatted calves. Tim Thanks ! my account grew 3%+ today due to your shared observations.(rsh,bhi,mbi) The abovementioned knowitalls have yet to recomend a winning stock before it rises(except for the solar boy).I've yet to see Tim waste his time trying to time a top -mostly he finds stocks showing weakness or topiness and then he capitalizes.

Winace said...

Wow. What a difference one day can make in the bloggers sentiment. From "There's no top in sight, randomly point your finger at a list and buy, buy, buy" to "Freefall! Everyone go to cash. Sell your longs!". Of course, Newequity hangs tight. Respectable. Maybe my words will haunt you tonight, like yours did mine. It's gonna hurt! Seriousy though. Might want to consider going cash, short term anyway. Let's see if we break or bounce. I love trading! The only activity which rewards the quickest "bandwagon" jumpers!

Winace said...

Tim,
Don't be modest with your account size. Only you control the market....... only you. Don't start position sizing now! Let'em have it man. Show no mercy!

Jeff said...

I take back what I posted earlier...this guy's an idiot and should be faded at all times...still shocked this fool had a book published!

yuri said...

The Dow should have major support @ 13,700 (2% below) and the SPX @ 1510 (2.5% below). Seems for now that playing these pullbacks on the short side is a loser's game. There are many that would like what you hold for a few percent less. Look for a blowout number on GOOG, AAPL, FFIV, and JNPR - I've been holding low-cost , slightly OTM calls on all - w/ the exception of AUG 600 GOOG's, which are going to quadruple if it gets any where near 600. If the BKX turns down tomorrow, it's time to go crazy w/ puts on anything with sub-prime exposure (been riding CFC down & if it drops another $2 it will complete an 18 month H&S formation (and yes, Tim, I ignored your advice, much as it seems you often do, and jumped on the ride down the right shoulder.

VC said...

Tim,
Keep it up man!
(In case you perceived any snarkiness from my comments yesterday, I can tell you for sure that they're unfounded. I am straightforward, when I say I like hearing about your downside bets I mean it. Like I said, I eat fish all the time.)

With respect, VC

VC said...

you know what clinched my joining your site? when you put up those charts of the shanghai index with that Chinese dude smirking in the distance...LOL...or that crocs chart with those loafer at ever dip...LOL!! or that chick from the server ad...such quality!!!

JakeGint said...

Vic(tor) fulminates:

The abovementioned knowitalls have yet to recomend a winning stock before it rises(except for the solar boy).

Oh, I dunno about that. I believe I agreed with Tim on his long MU call.

Vic(tor)resumes:

I've yet to see Tim waste his time trying to time a top -mostly he finds stocks showing weakness or topiness and then he capitalizes.

I guess we'd have to count you inobservant then, Vic. Either that, or you're not very clued into the securities Tim is trading.

Let me help out. When Tim posts about "RUT" puts, or "IWM" puts, or even "SPY" puts, those are index puts with which one is calling the direction of the market. In the case of a put, that would be calling the top of the current bull.

Fact is, Tim's calls have been relatively decent.

On the long side.

If he'd only promise to clamp on the tin foil hat whenever he feels an emination from the Ursa Major star cluster, we'd have one hellavu stock picking site here.

As it is, it's a fun place anyhow.

beanie11111 said...

The next few days (if that) will likely be the bears last stand. They gonna go in full force tomorrow, and many will eventually be trapped for the next leg up.

beanie11111 said...

Bad for longs those july calls will essentually all become worthless tomorrow. Overextended longs will cry to their mama.

:)

Tim Knight said...

So let's see, Beano...

If the market is up, you slam the bears.

But if the market is about to get killed, you slam the bulls.

Sounds like nice work, if you can get it!

Share said...

As a UK reader and being bullish, I find this blog is a valuable read to balance out the equation and provide thought and ideas...

At the end of the day everyone has there own opinion where the market is going, just opinions!! Yet I read every day stupid thoughtless remarks from fellow readers!

If you dont like or agree with what is written write a well thought out responce (or just not if you cant) rather than looking stupid and ignorant acting like you are 5 years old which you may well be.....

AssetStrategists said...

Tim,

I started coming here to learn more about technical charting. In addition, I get good laughs from the humor that is thrown in for free!

Personally, I would like to see more discussion of charts and why people see something heading up, down or sideways along with what they are actually doing about what they see. That is what I enjoy most about the posts--you showing us what you see and then showing that you put your money where your mouth is, uh, Charts are.

It will be great when the new blogging software is up and you can 86 the snarkiness and other comments that are not technical charting in nature. Why do posters have to take out their venom on each other in this public forum? I'd like to be able to have my kids read this when I'm showing them what I'm learning, but alas, I'd rather not have them absorb any filth in the process...

I like to see where you draw you lines and compare what you do to what I want to do. Sometimes, I just don't get what you are driving at and can't bring myself to trade your charts. At other times, I adopt your suggestions.

Now when I can get my entries and exits down, I will start making some serious coin. Until then, at least my account value is holding and growing a little while learning.

Thanks for keeping it real AND please increase the number of charts.

From a Trader-in-Training that gets sucked by the market from time to time.

Glen said...

Every day, in every way, the market is becoming more and more bearish. When was the last time the S&P, DOW made new highs and the rank and file stock didn't follow? You'll have to go back years. Make no mistake you bullish fools, distribution is rearing it's ugly head right here. Tops take some time to form but the signs are unmistakable: there is a massive topping process going on here and now.

Fear And Greed said...

Liquidity is about to run dry, I just bought more Heineken and Heineken profits have doubled, thus the market will come down as we expect.

JakeGint said...

Tops take some time to form but the signs are unmistakable: there is a massive topping process going on here and now.

If tops take some time to form, why would I short early?

I shouldn't even respond to the "bullish fools" arrogance, especially since Tim's trying to clean it up a bit here.

So I'll be curt.

If I'm a fool for following a market I have no chance of effecting on an individual basis, what does that make you for trying to call a top early?

Think about your response before responding with more useless name calling. It might save your portfolio.

Pierce said...

I give up. I thought we were going to get slammed this morning. The indices will probably be up before noon.

Tim Knight said...

You give up? Because of a tiny bounce from the initial lows? My portfolio is up 20%, and I've tightened up my stocks (newequity, that's 20%, not 0.2%).

Oh ye of little faith!

JakeGint said...

Take it where you can get it.

I guess the Bear is leaving its fellow in the securities industry alone... BSC down less than 1%.

Gary said...

20%? Oh Tim what are you doing? You are playing with fire. Please oh please reconsider the path you are taking. With this kind of leverage the first wrong trade will wipe you out.

Tim Knight said...

"20%? Oh Tim what are you doing? You are playing with fire. Please oh please reconsider the path you are taking. With this kind of leverage the first wrong trade will wipe you out."

It's not your problem. Don't worry about it.

And I'm still waiting for your apology.

Gary said...

Tim,
I apologize for trying to get you to trade sane investing principles. You know I'm right on this one if you are in fact an experienced trader. If you are a newbie then I can understand the irrational behavior. I don't think you are a newbie though. I can understand Winace's comments he hasn't been around long enough to have the error of his ways forced on him more than this once. Although it appears he's trying to make the same mistake again and lose that last 20%. You however should have enough experience to know that you are now on the path to blowing out your portfolio. I'm not saying this to be mean or to try and convert you to following the COT. I see you taking desperate measures that no rational experienced trader would take. If you are down to the wire and have no choice but to take a huge risk. Then for heavens sake you never ever take that kind of risk against the large secular trend or against the big money. The odds are stacked against you. It's like betting your whole wad on one number on the roulette wheel. You might get lucky but the risks are too great. Please reconsider what you are doing.

Chris said...

Tim,

I saw CROX shoes at my Henry's. Just seeing those shoes made me laugh and think of your blog. I didn't see anyone checking out the exotic colors, which has spurred my interest in buying puts 3 months out. Keep up the good work!

Fear And Greed said...

Gary, how about you trade your way and let Tim trade his. You don't have to read his comments, you agitator. You think trading is about being right, or do you miss the basic element that it takes two sides to make a market. Leave you ego someplace other than here.

newequity said...

I find it hard to believe that you made 20% over the past two days on a large account. What kind of risk are you taking? The market has barely moved 1%.

Gary said...

Fear,
On the contrary making money is absolutely not about being right or wrong. It's about position sizing, finding an edge and having the discipline to trade that edge. Any experienced trader knows this. Tim included. Which is why I can't understand why he's doing what he's doing unless he's desperate.

trendytradei said...

I have put tim's positions into a spreadsheet and I can assure everyone he is not up 20% in the past few days unless of course he leveraged his account 10x to ^RUS puts this morning. He is just bs-ing along with the rest of the idiots on this board who constantly pump solar and everything moving up.

Tim Knight said...

Sigh.

Not that it's really any of your business, but of my two accounts, here's the more conservative one, which is up about 20%


Click for image......


and here's the other, which is just a single put, and is up about 35% or so


Click for image........

trendytradei said...

I apologize because I was tracking the positions you posted a few weeks ago. Nice gains though. I wish I could make 30k in a day.

JakeGint said...

Okay, so now you know... he's trading about 5% or less, of his net worth.

In a way, that's "position sizing" and I vote we leave him alone about it.

Fear And Greed said...

Trendy, go ahead, tell me how you can "assure" me of your comment, you flaming idiot.

Tim Knight said...

Yeah, I mean, I've got a wife and kids.........it's not like I'm trading my entire net worth. This is a serious hobby of mine. Not my livelihood.

As long as we're doing this soul-baring, I'll also say that I've closed out my index puts (DIA and RUT) at a very nice profit and have taken a smaller LONG position on IWM.

Of course, that probably means the market will fall 70% tomorrow.

trendytradei said...

Look bitch, I can assure you because he is only actively trading <5% of his net worth. The rest of his positions are longer term puts and stocks which are not up 20% in two days. Got it little man.

Tim Knight said...

Trader's Tip of the Day!

Options are LEVERAGED instruments and thus are more VOLATILE than stocks. Which also means their percentage change can be substantial intraday!

Settle down, fellers.

yogi said...

Tim,

I never doubted your %'s. Congratulations!

Chris said...

I work in an office Tim, and I wanted to let you know I started busting up laughing when I read the title of your images.

Eatshit Anddie. Classic.

Tim Knight said...

It beats "image1" and "image2"

And I was frankly so insulted at being called a liar that I just had to get some snark out.

Fear And Greed said...

trendy, don't get your pantyhose in a bunch. Your flame is pointless here. As a matter of fact, pointless chatter from the likes of someone like yourself about a topic that you know nothing about is a waste of pixels.

Post your portfolio and trades or shut up and read because you have nothing of consequence to share.

trendytradei said...

Go fuck a goat greed. You are a nagging little fuck who has no idea what to do with the $100 in your investment account.

Tim Knight said...

Guys, guys! Come on now!

Just remember the basics - Bears are sober, intelligent and virtuous. And bulls are evil, deceitful, and exploitative.

That's not reason we can't get along.

JakeGint said...

Well, then Dennis, whos'at?

'Oo 'im? Why 'ees the King!

Wha...? Well 'ow d'ya know 'ees the King??

'Ee 'asn't got any schit on 'im.

Tim Knight said...

I could use some peril right now.

DirtyTed said...

Solar stocks have likely bottomed, get in for the next leg up!

bmbull said...

Maybe those who are concerned with Tim's leverage and position size could give Bear Stearns a call. They've got a couple of hedge funds in need of a little education on those topics.

newequity said...

I'm back. Looks like Timmy had a great day today. Congrats.

ps. Don't forget to mention the losses you have accumulated during the bull market from 2003-July 2007 that likely were 10x the gains today.

JakeGint said...

Man, if that wasn't the hippy hippy shake today, I don't know what.

How did that song go?

Rollah Coas-tah!

Yeah! Yeah! Yeah!

Rollah Coastah!

Yeah! Yeah! Yeahhhh!

misha said...

Don't bother these comments I really appreciate your efforts.Those charts are very helpful.
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